ECONOMICS (CBSE/UGC NET)

ECONOMICS

TECHNOLOGY

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

The government of a European country decides to invest more in capital goods by updating technology and machinery used across the country. Which of these is the MOST LIKELY result of this action?

A	The country’s literacy rate increases
B	The country’s gross domestic product increases
C	The country decreases the amount of taxes it collects
D	The country decreases the amount of goods it exports

Explanation:

Detailed explanation-1: -A business does not see an immediate increase in revenue when it makes investments in capital goods. An increase in capital investment allows for more research and development in the capital structure.

Detailed explanation-2: -Answer and Explanation: Capital goods create consumer goods. If an economy increases its production of capital goods, it is upgrading its technology and productivity. This means that in the future, it will able to produce more consumer goods at a lower cost.

Detailed explanation-3: -Capital goods are one of the four leading economic factors. An increase in orders and shipments of capital goods is a sign that businesses expect more demand and that the economy will grow.

Detailed explanation-4: -Economists use many different methods to measure how fast the economy is growing. The most common way to measure the economy is real gross domestic product, or real GDP. GDP is the total value of everything-goods and services-produced in our economy.

There is 1 question to complete.